HDFC Bank Q2 Result: Net profit jumps 17.6 pc to Rs 8,834 cr; NII grows 12 pc

Net interest income (interest earned less interest expended) for the quarter ended September 30, 2021 grew by 12.1 percent to Rs 17,684.4 crore from Rs 15,776.4 crore for the quarter ended September 30, 2020.

Advances grew at 15.5 percent reaching new heights driven through relationship management, digital offering and breadth of products. Core net interest margin was at 4.1 percent. New liability relationships added during the quarter were at an all time high.

This continued focus on deposits helped in the maintenance of a healthy liquidity coverage ratio at 123 percent, well above the regulatory requirement, which positions the Bank favorably to capitalize on the opportunities that would arise as the economy gains momentum during the festive months.

Other income (non-interest revenue) at Rs 7,400.8 crore was 29.5 percent of net revenues for the quarter ended September 30, 2021 and grew by 21.5 percent over Rs 6,092.5 crore in the corresponding quarter of the previous year.

The four components of other income for the quarter ended September 30, 2021 were fees & commissions of Rs 4,945.9 crore (Rs 3,940.3 crore in the corresponding quarter of the previous year), foreign exchange & derivatives revenue of Rs 867.3 crore (Rs 560.4 crore in the corresponding quarter of the previous year), gain on sale / revaluation of investments of Rs 675.5 crore (Rs 1,016.2 crore in the corresponding quarter of the previous year) and miscellaneous income, including recoveries and dividend, of Rs 912.1 crore (Rs 575.6 crore in the corresponding quarter of the previous year).

We added 256 branches and 12,259 people over the last twelve months and made other investments to position ourselves and capitalize on the growth opportunity. Operating expenses for the quarter ended September 30, 2021 were Rs 9,277.9 crore, an increase of 15.2 percent over Rs 8,055.1 crore during the corresponding quarter of the previous year.

The cost-to-income ratio for the quarter was at 37.0 percent.

Pre-provision Operating Profit (PPOP) at Rs 15,807.3 crore grew by 14.4 percent over the corresponding quarter of the previous year.

Provisions and contingencies for the quarter ended September 30, 2021 were Rs 3,924.7 crore (consisting of specific loan loss provisions of Rs 2,286.4 crore and general and other provisions of Rs 1,638.3 crore) as against Rs 3,703.5 crore (consisting of specific loan loss provisions of Rs 1,240.6 crore and general and other provisions of Rs 2,462.9 crore) for the quarter ended September 30, 2020.

Total provisions for the current quarter included contingent provisions of approximately Rs 1,200 crore.

The total credit cost ratio was at 1.30 percent, as compared to 1.67 percent for the quarter ending June 30, 2021 and 1.41 percent for the quarter ending September 30, 2020.

Profit before tax (PBT) for the quarter ended September 30, 2021 at Rs 11,882.6 crore grew by 17.5 percent over corresponding quarter of the previous year.

After providing Rs 3,048.3 crore for taxation, the Bank earned a net profit of Rs 8,834.3 crore, an increase of 17.6 percent over the quarter ended September 30, 2020.

Balance Sheet: As of September 30, 2021

Total balance sheet size as of September 30, 2021 was Rs 1,844,845 crore as against Rs1,609,428 crore as of September 30, 2020, a growth of 14.6 percent.

Total deposits as of September 30, 2021 were Rs 1,406,343 crore, an increase of 14.4 percent over September 30, 2020. CASA deposits grew by 28.7 percent with savings account deposits at Rs 452,381 crore and current account deposits at Rs 205,851 crore.

Time deposits were at Rs 748,111 crore, an increase of 4.2 percent over the corresponding quarter of the previous year, resulting in CASA deposits comprising 46.8 percent of total deposits as of September 30, 2021.

Total advances as of September 30, 2021 were Rs 1,198,837 crore, an increase of 15.5 percent over September 30, 2020. Retail loans grew by 12.9 percent, commercial and rural banking loans grew by 27.6 percent and other wholesale loans grew by 6.0 percent. Overseas advances constituted 3.5 percent of total advances.

Half Year ended September 30, 2021

For the half year ended September 30, 2021, the Bank earned a total income of Rs 75,525.6 crore as against Rs 70,522.7 crore in the corresponding period of the previous year.

Net revenues (net interest income plus other income) for the half year ended September 30, 2021 were Rs 48,382.6 crore, as against Rs 41,609.6 crore for the half year ended September 30, 2020.

Net profit for the half year ended September 30, 2021 was Rs 16,564.0 crore, up by 16.9 percent over the corresponding half year ended September 30, 2020.

Capital Adequacy:

The Bank’s total Capital Adequacy Ratio (CAR) as per Basel III guidelines was at 20.0 percent as on September 30, 2021 (19.1 percent as on September 30, 2020) as against a regulatory requirement of 11.075 percent which includes Capital Conservation Buffer of 1.875 percent, and an additional requirement of 0.20 percent on account of the Bank being identified as a Domestic Systemically Important Bank (D-SIB). Tier 1 CAR was at 18.7 percent as of September 30, 2021 compared to 17.7 percent as of September 30, 2020.

Common Equity Tier 1 Capital ratio was at 17.4 percent as of September 30, 2021. Risk-weighted Assets were at Rs 1,190,270 crore (as against Rs 1,037,483 crore as at September 30, 2020).